5G SERIES: 5G and New Technology Infrastructure between China and the EU

Current Strategies and Trends

This article is the 1st article of the series of 5G developed by the Technology and Media Working Group of the European Guanxi Editorial Team. Every month we dive into a different aspect of 5G with regards to the EU-China dynamics. You can read the rest of the articles here.

Cityscape © mohamed_hassan / Public domain / Pixabay

The recent necessities created by the Covid-19, such as social distancing and running businesses remotely, have highlighted the importance of adopting new technologies, such as 5G. Technological infrastructures need to be improved to mitigate the losses due to the emergence. With the enhancement of the infrastructure, the states could reduce the distances between each other. In this manner, recovery plans and other development programs should start to work concretely, at least in part.

China is aware of the value of infrastructures in general. The Chinese recovery of economic growth, with rates as high as the last four decades, will include a massive amount of money to spend on the building or reinforcing the “new infrastructures”. Giving some examples of this concept, 5G networks and data centres are at the core of the recovery project. Together with high-speed railway lines – to be built both in the country and abroad within the framework of the Belt and Road Initiative (BRI) – 5G is on the top of the priority list to overcome the Covid-19 outbreak.

Given the importance of such technological infrastructure in today’s world, this article aims to define the potential roles of 5G in shaping the relationship between the European Union and China. To this purpose, we identify several strategies in the adoption and development of 5G developed by both parties, as we forecast the expected trends. In the first sections, we delineate the two approaches identifying their core priorities, while the concluding paragraphs build some reflections to be explored in future analyses.

The NATO and EU Perspectives

At the end of October 2019, defence ministers prepared the stage for a meeting of NATO leaders in London. During this meeting, ministers addressed various issues and one of them was the management of 5G. NATO allies – together with the European Union, Sweden, and Finland – discussed a comprehensive response to the hybrid threats, with the objective of improving national resilience. For this reason, ministers of the different countries

arranged an upgrade to the baseline requirements of NATO regarding civilian telecommunications and then including 5G. These standards involve detailed analysis of the vulnerability and the risks, in order to recognize and, consequently, mitigate the possible cyber threats. Following this idea, it will be increasingly relevant to focus on the possible consequences of foreign ownership or their control on the strategic infrastructure, but also their investments in the national firms. As reported on 25th of October 2019 (NATO, 2019), the NATO Secretary-General, referring indirectly to 5G, reinforced the idea that "the next-generation telecommunications will affect every aspect of society, from transportation to healthcare, as well as our military operations”.

In September 2020, during the State of Union (European Commission, 2020), the President of the European Commission, Ursula von der Leyen, announced the initiative of the Commission to take further steps in the agenda of the Digital Decade to strengthen the digital sovereignty of the EU. A Recommendation has been published by the Commission requiring Member States to improve investment in very high-capacity broadband connectivity infrastructure, including 5G, which is now, and even more in the future, the most fundamental block of the digital transformation and an essential point from which the recovery must start. The deployment of 5G networks will be necessary to offer important economic opportunities for the next few years, as a key resource for European competitiveness, sustainability, and a major facilitator for digital services in the future.

As reported by the Press release (European Commission, 2020), the Commissioner for the Internal Market, Thierry Breton claimed that “digital infrastructures have proven to be crucial during the pandemic to help citizens, public services and businesses get through the crisis and yet recent investments have slowed down”. At the same time, he also highlighted that the access to broadband Internet "represents both a fundamental commodity for Europeans and a geostrategic stake for companies" and that, as such, the Member States "must enable and accelerate the rollout of secure fibre and 5G networks" as the greater connectivity will not only contribute to creating jobs, boosting sustainable growth and modernising the European economy, but it will also help Europe build its resilience and achieve its technological autonomy.”

It is always difficult to define the history in the making, but around the latest technological developments is growing a large consensus. Many analysts support the definition of a new industrial revolution when referring to the technological improvements in various fields such as big data, Artificial Intelligence (AI), sensors, automation, and robotics. The so-called Industry 4.0, or the Fourth Industrial Revolution (4IR), can widely be classified as one in which computers, automation systems and other devices operate harmoniously together merging the physical, digital, and biological spheres. In most cases, this process can take place using the 5G which allows the harnessing of data at low latency and high speeds in any location (Newman, 2021).

The Chinese perspective

With a total of about 911 million customers and a penetration of 60.4%, China figures among the top nations for smartphone use (Newzoo's Report, 2021). Considering that by 2020, the 5G market revenue had grown to 0.6 trillion yuan, with an aggregate volume of 5G smartphones reaching 67 million units (Slotta, 2021), the country is surely leading the way in the development and commercialization of 5G technologies, and its strategy represents a solid case for study.

Since the genesis of the International Mobile Telecommunications-2020 (IMT-2020 Standard) in 2013, the Chinese Ministry of Industry and Information Technology, National Development and Reform Commission, and the Ministry of Science and Technology have jointly urged the development of 5G technological standards. The project is the result of the coordinated effort between several agents acting in each specific domain. While universities and research centres lead the innovation system, the regulatory board brings together the government, public institutions and policymakers, and the market forces are represented by providers and operators. Although there is no explicit hierarchical division between the three areas, the development plan evolves under a sophisticated top-down approach.

Indeed, China’s 13th Five-Year Plan pushed forward the need to “actively promote the 5G and ultra-wideband key technologies, launching 5G commercial use”. On the other hand, the Development Planning for Information and Communication Industry 2016-2020

blueprint boosted the support required by the national R&D, technical standards, and commercial services to become global leaders of digital technology. Over the past ten years, most of the Chinese policy efforts within the scope of economic growth endorsed the development of innovation and digital infrastructures. This strategy also echoes the idea of enhancing the country’s presence on the global stage, with some core directives included in the Made in China 2025 and the latest 14th Five-Year Plan. Thus, there is no doubt that 5G represents an essential infrastructure for the country’s economic and social development, as well as a priority for its leaders.

To this aim, all the actors involved at any level of the national innovation system continue to play a fundamental role in boosting the development of 5G. Among these, Huawei Technologies Co., Ltd, the Chinese telecommunications giant and global provider of 5G mobile technology, distinguished itself by first announcing its plans to invest a minimum of $600 million into related R&D as early as 2013 (Reuters, 2013). China Telecom, on its end, included the "achievement of the 5G target" in the 2018 White Papers as one of the main objectives, aiming at implementing the overall national strategy and boosting the development of digitalised industrial development. Two national schemes simultaneously support the finalisation of 5G in China, namely: the gradual improvement of the existing technology, networks and performance, and a completely new design for network structures and wireless technologies (Qian et al., 2017). This strategy has recently found its way in the words of President Xi Jinping, who affirmed that the country must "accelerate the construction of new infrastructures such as 5G networks and data centres" while also "speeding up key projects and major infrastructure construction already included in state plans".

As mentioned above, there are two fundamental aspects to keep in mind when dealing with the progress and commercialization of 5G technology in China, one concerning the development of in-house infrastructure, and the other regarding the influence attached to its role in the global theatre. As a comprehensive part of the BRI, a coordinated 数字化一带一路(shùzìhuà yīdài yīlù) or Digital Silk Road (DSR) was also launched in 2015, adhering to the Chinese vision for global connectivity. The plan provides for a coordinated action of telecommunications (ZTE, China Mobile, and Huawei), the Internet of Things (IoT), and e-commerce platforms (Alibaba and JD.com) to achieve regional integration. In the view of the Chinese government, the DSR establishes “a community of common destiny in cyberspace” (Bartholomew, 2020). President Xi Jinping, presenting at the 2019 economic forum, announced that China is “ready to share technological inventions with all partners, in particular, 5G technology” (NDTV, 2019). Recent figures (Ghiasy and Krishnamurthy, 2021) have shown that DSR-related investments in digital infrastructure projects outside China had reached $79 billion by 2018, reinforcing the importance of 5G in international dynamics.

5G horizon: current and future trends to keep an eye on

Much of the discussion on 5G involves arguments raised both within and beyond the scope of the related industries. Hereafter, we identify some crucial scenarios in the current and future conversations between the EU and China on 5G.

First, we consider the issue of national security, both within cyberspace and at the supply-chain level. The 4IR and 5G networks will lead humanity towards a new level of modernity. This revolution will affect different sectors, from medicine to autonomous cars. The increased capabilities of cyberspace present new challenges for national governments, which have the role to protect their citizens and companies in the national territory. The greater the improvements in cyberspace, the greater the challenges for the national security of the states. National security could be threatened more in cyberspace than in the other conventional spaces. Furthermore, criminals will be encouraged to attack through the networks because of the possibility to maintain the anonymity and low costs of the attacks. Moreover, for Western countries, this is a unique challenge in history since it is the first time that new technology comes from the East. More specifically, 5G calls into question that very same technological development that has allowed the West to lead the world until very recently (Mele, 2020).

On the other hand, both China and the West seem preoccupied with finding feasible solutions for the most urgent challenges brought about by the 5G transition. Data extraction and use have been at the centre of such a debate for quite a while now. The 5G networks allow a faster and more detailed data transmission from IoT devices to mobile carriers. As such, their adoption implies dealing with security-related questions as well as privacy concerns. Among others, Qiu et al. (2020) addressed these issues by providing overall security and privacy solutions for 5G applications. The study spreads across different layers of operation, according to whether problems might surface at the service, platform, network, and terminal level. Another concern involves the possible linkages between tech companies and governments, which leads to even crucial security issues.

Security is at the bottom line of another relationship: that between the US and China. 5G, as we argued, is likely to be a determinant factor in shaping the contours of the future interactions between the two powers. Some have called for a "Cold War"- like scenario (Brands and Gaddis, 2021). However, in light of what is explained by some of the exponents of the realist theory, it is necessary to overcome these Cold War patterns when approaching 21st-century US-China relations. Indeed, Kenneth Waltz (1993) predicted that after the Cold War, Japan would become more independent from the United States in matters of national security and would even provide nuclear weapons. John J. Mearsheimer (1994) argued that NATO and the European Union would not have much chance of surviving after the Cold War. These predictions have not come true because the international system is not limited only to power politics, but other variables must be taken into consideration. Today's economic interdependence is unprecedented in human history and plays an extremely relevant variable for all actors (Zakaria, 2021).

Lastly, the EU seems to have well understood this lesson, taking on a middle road between the US and China. European governments have found the right balance between using the Chinese equipment for the 5G infrastructure while avoiding repercussions from the US side. While on the one hand, it is possibly true that the US government holds substantial leverage on European businesses, nevertheless, the very same actors have shown increasing interest in engaging with the Chinese tech companies. All in all, as Lawrence J. Lau (2020) put it, the decoupling of the two world powers could result in some beneficial results for the rest of the world, for instance, with the establishment of parallel and mutually compatible 5G systems.

To summarise, the future of 5G continues to evolve daily. What we can do for now is to keep monitoring current trends to unfold what is coming next.

Stefano Mancuso has a master’s double degree in China and Global Studies at the University of Turin and Tongji University based in Shanghai. During his bachelor’s degree in International Relations he had various work experiences abroad. In particular, he worked in the United Kingdom, Poland, Spain, Kenya and Greece. He is passionate about international relations with China, especially in the economic and technological field. You can find him on LinkedIn.

Giulia Interesse is currently pursuing a PhD at Peking University, focusing on public management and innovation policy research. Her goal is to identify effective and impactful solutions to social issues surrounding international technology transfer and innovation efforts for development. Aside from her interest in Chinese politics and policy-making, she is keen on learning about different cultures and exploring opportunities for global cooperation. You can find her on LinkedIn and Instagram.

The opinions expressed here are those of the writers and do not represent the views of European Guanxi.

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